Business proposal

Business proposal

A research conducted in Canada reveals that it is very stiff competition on the courier service, and therefore staring a business on courier services company might be very challenging owing to the exiting business of the same nature. However, with an increasing demand for courier services in the USA, starting up a courier service business in the country is likely to be very profitable. This is also in line with the various elements of global business need, which calls for a relatively faster movement of sound as well as services. The proposed business venture will be a courier company in the USA. The business will be concerned with the evolution of goods and services from one area to another. The market will, at the start, be located in the New York area alone will expand its facilities after a period of every one year to cover the entire USA as its long term project. It will be involved both at the start of goods and services of almost all kinds.

Drivers and influence of globalization of the business venture

Globalization play one of the most important from in any form of business. Due to the impacts of globalization, businesses have managed to reap alloy through connecting with the millions of clients from various parts of the world. Generally, globalization is the leading driver to expanding businesses. Most businesses have greatly managed to expand and grow as a result of the sharing of information and most importantly technology that comes with globalization. Globalization allows from sharing of business ideas and business models which is the most important tool towards how business are managed a conduced. Sharing of information from the most advanced courier and logistic companies such as FedEx and DHL global will promote the operation of the business that I intend to start in USA. The other impact of globalization on the business venture is the sharing of technology and technological information. Globalization is likely to promote the sharing of the technology and the information on technology which is likely revolutionizes the way in which the business venture is likely to operate. The end result of this impact of this is an improved business operation as a result of the advanced technological growth.

Factors that create international business opportunities

1.      Education

Education is considered one of the leading factor for international business opportunities. Since most people move from one place to the other to pursue education, the individual are likely to share particular information, goods, and serviced globally. This create a business opportunity forte courier services business as people are likely to share information from their places of study to the people they did leave behind.  Students and parent and guardian alike are likely to use the courier service globally this way, creating the international business opportunity for this venture. The business is therefore likely to expand its operation globally as a result of the element of education and sharing of key information which is often associated with education as people travel globally for the purpose of education but have the urge of sharing good, services and information through various form which the business venture is likely to take part in.

2.      Work

The other factor which create the international business opportunity for the proposed business venture is work. People move from one place to the other for purposes of work. However, they have the need of sharing goods and particular services globally with their friend, families and other workmate. As a result the business venture is likely to be involved in the transfer of these goods and service globally creating a massive business opportunity for the courier business not only in the USA but beyond. The business will therefore be involved in sharing the goods and services on the demands of the client expanding its capacity to operation beyond the birder of the USA and move to operate internationally. This element is also likely to promote the development of the venture in future to other location beyond USA to regions such as Europe, Asia, Australia and Africa.

3.      Leisure

Globally, people move from one place to the other for the sake of leisure and holiday. This element of movement create an international opportunity for the business venture as people would want to send or share gifts inform of goods and services while on leisure globally. This aspect do create a business opportunity for the business venture which is likely to have the opportunity of sharing its information using the services of the business venture.  The business is likely to go international in sending these individuals’ goods and services to their homes and across the different places which they are located.

Economic and geographic influences on proposed global business operations

Logistic business is very sensitive to the regional economic and geographical influences. However, different parts of the world have varying economic nature. Therefore, this means the global business operation of the proposed business venture if expands to operate globally beyond the border of USA is likely to be affected adversely. Economically, the business is likely to be effected by the regional prevailing economic situation where the company will be operating. For example in case the business will be operating in Asia, the business will have to adhere to the economic situation of the country in Asia where it will be operating at a specific time.

A region with relatively lower economic development will therefore impact on the business negatively while area which has a stronger economic power such as USA and Europe will impact on the business operation of the company positively. Geographically, the business will operate in areas which are geographical defined. The business is likely to focus on specific element of the geographical aspect such as area where the factor which promote international business operation are key. Population aspect of the geographical element is likely to be the leading causes of any business operation. For example in areas where the population are relatively higher, such geographical areas are likely to be considered further compared to the others areas with lower population density. This element will greatly influence the business venture operations.

Social, cultural, political, and legal influences

Any business venture is influenced by the social aspect. Socially, the manner in which people relate, interact and live in the USA where the business will be sent influences how it will opera. Social element such as interaction of the people and the way the live and social influence how much they will need the help of the business. For example business in area where the social setting is that people value one another much will have a better business opportunity for the business venture as individuals will be more concerned with sending presents and other goods to the other individual creating business opportunity  for the business

Culturally, the business will be affected by the cultural aspect such as how people view one another. Cultural practises will ether hinder the courier services or promote them. Equally political influence will have massive influence on the nature of the business. Areas which are politically stable and robust will help the business to venture more and expand quite fast compared to areas which have political turmoil. Lastly, the business will also rely on the legal influences. Business is likely to thrive in regions where the legal policies on taxation, business rule and regulation as well as the form of business relation are quite supportive of the business practises.

Influence of competition

Competitor influence business in various way. For business which are at the verge of starting their operations, the impact of competition is relatively greater compared to those which are better established. For the business venture, the element of competition is likely to impact much on its operation especially from other business which are better established such as DHL and FedEx which have been in the business for comparatively longer period of time. The impact of competition in the business in this case is a reduced business profits level as most client are more  loyal to these will established business venture which have been in operation for relatively longer period of time.

International business strategy

Due to the increase in globalization in the past years, many companies have been able to cross national borders and do business abroad. However, many terms have been given to those companies that are operating in multiple countries, transnational companies, global business and international firms. The successful expansion of companies into foreign markets often demands that the company or the business adopt the international business strategies that can fit their capabilities and needs. Business expanding into new geographic markets or foreign countries must adapt to certain components of their strategies to accommodate local environments (Verbeke, 2013).

International business includes any type of business activity that crosses the national borders for example moving your business from Canada to USA. International business is defined as an organization that buys or sells goods and services across two or more national borders even if the management is located in a single country. This study focuses on the particular problems and the opportunities that may emerge in starting a business in a foreign country. Several parameters and environmental variables are very important in an international business. The important guiding principles of a business engaged in international business activities should therefore engage incorporate a global perspective. The business guiding principles can be defined as the broad categories products offered, market served, capabilities and the results (Verbeke, 2013).

International business and the strategic international business planning are the key concepts here. The quick and easy international movement of funds and goods means that doing business internationally has increased. Any person planning to do business internationally will face the already established competition? However, the strategic planning often allows the business to achieve its set goals, setting the right priorities and effectively utilizing the resources (Verbeke, 2013).

International strategies

At the corporate level, an international investor may decide to use the three international strategies, that is; global, multidomestic or transnational. These three strategies reflect tradeoffs between the local responsiveness and the global efficiency for the business to gain the competitive advantage.

Multidomestic strategy

The multidomestic strategy uses the maximum local responsiveness by decentralizing decision making authority to the local business units in each country so that it can create products and services optimized to their local markets. It puts a focus on the competition within each country and maximizes the local responsiveness. It makes the assumption that the markets differ and are therefore segmented in each country’s boundaries. The customer needs and desires, political, industry conditions and social norms vary by country. Using this strategy the international business can customize its products to meet the specific needs of the local consumers. However, one disadvantage of the multidomestic strategy is that the business faces more uncertainty because of the tailored strategies in different countries. Because of the different strategies in different locations, the business cannot take advantage of the economies of scale that could help reduce costs for the business overall (Verbeke, 2013).

Global strategy

The global strategy is centralized and controlled by the home office and maximizes global efficiency. In this strategy, products are more likely to be standardized rather than tailored to local markets. It emphasizes economies of scale and offers greater opportunities to utilize innovations developed at the corporate level or in one country in other markets. This strategy decreases risk for the business, the business may not be able to gain as high a market share in the local markets because the global strategy is not as responsive to local markets. The global strategy is difficult to manage because of the need of coordinating strategies and operating decisions across country borders (Gilligan et al, 2013).

Transnational strategy

This strategy combines both multidomestic and global strategy to get both the global efficiency and the local responsiveness. Given the differences across the markets and similarities being fostered by the flatteners, this strategy is therefore appropriate and desirable. However, combining both the strategies is difficult because it requires fulfilling the dual goals of flexibility and coordination. The business must balance opposing local and global goals, and on the positive side, the business that implements a transnational strategy effectively outperform the competitors who use the global strategy and multidomestic strategy (Gilligan et al, 2013).

Strategic International Business Planning

For your strategic business planning to succeed in the greatly competitive international business markets, then one should consider several factors. First, one needs to find and choose the international market that best fits your type of business. Analysis and evaluation of the products or the service demand in different international markets. However, choosing the correct destination according to the business type is the first key step of the strategic international business planning (Briscoe et al, 2012).

Understanding the competitors is another key strategy, knowing the competitors in the chosen international market is very crucial. However, if the competition seems to be really tough then it is better to choose a location with smaller competition, even if the product demand is low. This is because one can gain higher market share with little competition. Third, another important part of the international business planning should be identifying the growth opportunities. The growth opportunities are greatly meant to make the business grow by finding new markets in the previously explored market share and profits in the existing international markets. Therefore, it is important to define the growth strategies during the strategic planning (Briscoe et al, 2012).

Developing a local plan is another important aspect in strategic planning, international businesses differs greatly with the local businesses. You may want to deal with markets in several countries in different parts of the world. Therefore, different strategies are necessary for each location due to the variation in the political, legal or the economic climates of the different areas. One should be appropriately prepared to adopt the different plans for different markets depending on the specific market requirements (Twarowska et al, 2013).

If one is considering getting the international business expansion then finding strategic partners is equally important. One will require different strategies for the different markets. In this situation, it might be difficult for a single entity to effectively execute expansion. Finding a strategic partner is one factor that should be put into consideration, being aware of the market trends in the regions where you are planning to expand can greatly assist with the expansion (Twarowska et al, 2013).

Cultural differences can also determine the success of the international business. For instance, if the service or product does not add value or meet the desires of the local people or market. It is important to have a clear understanding about the lives of the community and what they mostly value. You should also learn on how to conduct business among the local markets.  The effects of the cultural differences should not be underestimated, more time and energy should be invested to pursue an international business.

Being flexible to the changing needs is important, the economic and the political circumstances in any market may not remain the same for a long time. Conducting business in the foreign markets is achievable if it is flexible enough to work within the local laws and the regulations guidelines. One should constantly analyze the situation of the market so that the strategy and planning can appropriately respond to the changes in market circumstances so as to maintain a continuous growth of the international business. However, when reviewing the legal and regulatory commitments, it is advisable to seek an experienced legal counsel for overseas business practices to identify the hazards that are likely to cause barriers for the international business (Twarowska et al, 2013).

The local government stability and its authority are very crucial when reviewing the international business options. The aspects to consider here include; the currency exchange rates, the access to the required materials and resources, government assistance programs, business protection policies, employment and immigration laws and the transport and communication options. The government stability holds the key to contract integrity, the employees’ security and their rights, intellectual property and the trademark and other facets in conducting business (Briscoe et al, 2012).

Lastly, the business case should respond to the challenges, adversity and the rewards of expanding overseas. Some of the strategies to be considered should include; performing a market study to get a clear understanding of the market’s personality, economic feasibility, market trends, financial costs patterns and the market forecasting. Studying the financial feasibility to realize a financial sense (Briscoe et al, 2012).

The SWOT matrix analysis

This is the model that an investor can use to appropriately analyze the competitive position of the company. The SWOT analysis can be used to assess the internal and the external aspects of doing the business. In the strategic management, SWOT is the first key step of planning and the key to decision making in order to focus on the key issues of starting a business out of the country. This is however the concept of determining the strengths, weaknesses, threats and the available opportunities. Each letter in SWOT represents one key word (Gürel et al, 2017).

The SWOT analysis is the best strategy plan that an intentional investor can use to identify the strengths, weaknesses, opportunities and threats that re related to business competition and the project planning. This analysis is intended to give the specific objectives of the business venture and therefore identify the internal and external factors that the investor can consider favorable and unfavorable to achieving the business objectives (Oreski, 2012).

Strengths and weaknesses are the internal and the positive attributes of the company, these are the things that are within the control of your company. For instance, these are the value creating factors that one should consider. They include skills, assets, or the resources that the business has at its disposal relative to the competitors. One can consider strengths in terms of ; uniqueness of the products, location of the business, worker’s unique skill set, access to financing, operational efficiency and the corporate culture. The weaknesses can be looked at in terms of the; location of the business, access to the resources, lack of customer service and quality, poor marketing and sales and undifferentiated products or services(Gürel et al, 2017).

The opportunities and the threats are the external value creating factors of the business that cannot directly be controlled by the business, but they emerge from either the competitive dynamics of the business. They can also emerge from the demographic, political economic, social or the cultural factors. The opportunities in the SWOT matrix could be; a new emerging or he developing market, the market trends, new technologies and the social changes. The threats could be; the new competition in the market, price wars, political changes, taxation, availability of the resources and the competitor monopoly (Oreski, 2012).

Competitive Advantage and Value Chain Analysis

In the strategic management, the competitive advantage means superior performance relative to other competitors in the same business or superior performance relative to the business average. In considering International Business Strategic Plan you should strive to achieve the advantage, the business is able to achieve an edge over its competitors through the following ways; through the external changes, when the PEST factors change, several opportunities can appear that if worked upon can provide many benefits to the business. The business can also gain an upper hand over its competitors when it is made to properly respond to the external changes faster than other businesses (Wang, 2014).

The advantage can greatly be gained when a business becomes the first to exploit the external changes. If the business is slow to changes in the foreign market it may not likely to benefit from the arising opportunities. If the business has VRIO resources then it can successfully have an edge over the competitors due to the superiority of the resources. If the business owner plans to have a developed competence in production of for instance electronics then it would have a least advantage as other companies would find it hard to replicate the processes, skills, and the capabilities needed for the competence(Wang, 2014).

You can also create superiority through innovation, this means that the innovative products and strong business models provide the strongest competitive edge. The business ability to produce goods or services more efficiently than the competitors will often lead to a greater profit margin and therefore create a comparative advantage. For example, consumers will buy gas from a gas station that is five cents cheaper than other stations. The business economies scale and the geographical location can also create a competition advantage (Wang, 2014).

The value chain

This is used to describe the business activities that takes to create a product from the start to finish. This analysis can help an international business investor to create a competitive advantage, improve efficiency and increase the profit margins. If the business analyzes the value chain then it can evaluate ways to improve its competitive advantage. The value chain analysis can therefore be used by a business to formulate strategies and understand the sources of competitive advantage, identifying and developing the interretionships between the activities that create value. The value added implies both value creation and the value capture, it is employed to examine and evaluate entire industries and industry clusters, as well as the specific systems within the firms. It can also be employed to examine activities that are increasingly spread over several countries or the global value chain. (David et al, 2013)

The value chain analysis includes both the qualitative and quantitative approaches, there seems to be no rule as to how this approach should be conducted in a business. However, suggestions are that qualitative approach should be conducted before the quantitative investigation. This approach to planning can provide a rich description as well as the numerical analyses of strategically important activities. In an international business the analyses is a worthwhile method that you can use to divide the business into activities in order to understand their impact on the business unit (David et al, 2013).

Value Proposition

This is the value to be delivered, communicated and acknowledged, it identifies the clear, measurable and demonstrable benefits that a consumer get when buying a particular product or service. It convinces the consumers that the business product or service is better than others in the market. It summarizes why a consumer should buy a business product or use its services. It is an important part of the business branding. Creating and delivering the value proposition is important that marketing planners need to consider in the planning strategies. It helps the international business differentiate the brand from the competitors. When you are creating the value proposition it is significant to think about the key questions like, ‘what is the product or service?’ and ‘who is the target market?’ Once you answer these questions, then you will have a strong value proposition because you will have the full idea of how your products and services differentiates you from the competitors (Payne et al, 2014).

Financial and economic forces influencing international business

The economic forces are the factors like monetary and fiscal policies, interest rate, employment, inflation, political changes, energy and demographic changes. All these factors have direct effect on how business produce and distribute their products and services. These effects of the economic forces in business is always reflected in the economy. If you want to start a business in foreign country, then it is important to take into consideration the economic forces that are likely to affect the business. These are, the government influence, international transactions, expectation and speculation and the supply and demand for the products (Shenkar et al, 2014).

The financial forces in an international business id determined by; the foreign exchange. The value of any particular currency is determined by the market forces basing on the trade, investment, tourism. Imports and exports arise in import will increase the supply of one’s currency consequence, is depreciation of the currency. Taxation and tariffs are levied on goods as they cross national boundaries, starting a business in foreign country will require you to study closely the custom duty fees and the taxation in order to prevent unnecessary losses. The tariffs are normally implied by the government to protect domestic businesses from foreign competition. The tariffs normally affect the international business by making the foreign products expensive that shows the consumers have to pay more (Shenkar et al, 2014).

Inflation on the other hand has a great impact on the international business, the cost increases can be passed on to the consumers easily if there is general increase in the prices. Rising prices are also likely to affect the assets held by the firms and therefore the value of the fixed assets are likely to rise. This will in turn increase the value of the business, and when reflected on the balance sheet may make the company financially secure. Inflation that are not excessive, the business could decide to raise their own prices and borrow more to invest and ensure that increased asset value appear on the business balance sheet. 10% and above inflation can be damaging to the business (Shenkar et al, 2014).

Potential risks associated with their potential global business

Taking your business internationally engages the business in international financing activities which takes the additional risk along with the opportunities. Some of the risks involved in taking the business internationally are segmented into four main categories, these include the foreign exchange risk, country risk, regulatory risk, and the political risks.

Country risk

You should weigh the benefits of your business abroad against the pitfalls. Cases like poor infrastructure like the roads, bridges and telecommunications networks can really make it expensive to conduct your business in a foreign country. The economic conditions such as high rate of unemployment or great number of unskilled labor can be great barriers to entry. Some rogue countries may possess untapped potential, but at the same time may pose risks like terrorism, civil unrest or internal conflict. Anti-foreign sentiments among the citizens or the government officials may make doing business abroad a big challenge.

Political risks

You should determine the political climate of the country you are planning to take your business. Unstable government will not be able to protect your business interests. Poor foreign trade policy within the country will mean that your business will have to navigate through the nuances of allying with government. However, an incoming government may not be somehow business friendly and may make some decision like increasing the tariffs. Although  the amount of trade barriers have of lately diminished due to free trade agreements and other similar measures, the everyday differences in the laws of foreign countries can influence the profits and the overall success of doing business abroad.

An unsteady and a revenue stream that is not predictable can also make it hard to conduct your business in a foreign country. However, despite these negative exposures, an international business can still open opportunities for reduced resources costs and large lucrative markets. There are some ways in which a company can overcome some of the risk exposures. For instance, a business may attempt to hedge some of the foreign exchange risks by buying futures, forwards or options on the currency market.

Regulatory risks

A sudden change in the trade laws or ineffective legal system will expose your business to regulatory risk. For instance, a nation with no clearly defined intellectual property laws makes it difficult for the software companies to protect their investments. The changes in banking laws may also limit the ability of your company to repatriate money to your home country or limit the funding access.

Currency risks

The fluctuations of a foreign country currency can greatly diminish profits when doing the conversion back to your country. You should first analyze the risks and rewards of making an investment in a foreign country. The currencies of stable governments are less volatile than those of undeveloped countries. Hedging strategies could mitigate some of the currency risk, however your business is still at the mercy of the vagaries of the local currency market. The currency rates may be affected by sudden changes in monetary policy.

International Trade Association

If you are planning to do your business internationally, you should contact then local office of the ITA in your country. The ITA is one of the agencies within your country that is responsible for provision of small and medium sized businesses with customs and trade facilitation support in foreign countries.

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